Travel and tourism to generate $8 trillion this year
TRAVEL and tourism is still one of the world’s leading growth sectors, and over the last four years the travel and tourism economy GDP has increased at an average annual rate of 4.0 per cent, faster than the overall economy.
Over the same period it has made available 34 million new jobs. Although a slowdown is anticipated within the industry in 2008, the prospects are bright for the next 10 years. These were some of the facts presented by the World Travel and Tourism Council (WTTC) in association with its research partner Oxford Economics during a press conference at ITB this year.
The industry worldwide is expected to generate close to $8 trillion in 2008, rising to approximately $15 trillion over the next 10 years. This was revealed by the latest tourism satellite accounting (TSA) research, the WTTC and its strategic partner Accenture.
Overall, the new TSA results reveal a moderate impact on the travel and tourism industry as a result of the global economic downturn, with its annual growth rate slowly 3 per cent in 2008, in comparison to 3.9 per cent in 2007.
Looking beyond the 2008 downturn, the long term forecast points to a mature but steady phase of growth for the world industry between 2009 and 2018, averaging a growth rate of 4.4 per cent per annum, supporting 297 million jobs and 10.5 per cent of global GDP by 2018.
WTTC President Jean-Claude Baumgarten said, “Challenges come from the US slowdown and the weak dollar, higher fuel costs and concerns about climate change. However, the continued strong expansion in emerging countries - both as tourism destinations and as an increasing source of international visitors - means that the industry’s prospects remain bright into the medium term.”
Regionally Africa, Asia Pacific and the Middle East are experiencing higher growth rates than the world average, at 5.9 per cent, 5.7 per cent and 5.2 per cent respectively, while the mature markets, most notably the Americas and Europe, are falling below the world average with a growth at 2.1 per cent and 2.3 per cent respectively.
The overall impact of this slowdown for mature markets is expected to be offset by the strength of the emerging markets according to John Walker, chairman of Oxford Economics. “In particular, China, India and other emerging markets are still growing rapidly, which will increase both business and leisure travel, while many countries in the Middle East are undertaking massive tourism related investment programmes.”
Even in countries with slowed economic growth there is likely to be a switch from international to domestic travel rather than a lessening in demand for travel and tourism.
Among the 176 countries covered in the TSA research, the United States continues to maintain pole position as the largest travel and tourism economy, with its total demand accounting for more than $1,747 billion this year. With a growth rate at 1.1 per cent in 2008 the credit crunch is leading to a marked slowdown in US economic growth and is likely to restrict the business travel of those working in financial markets.
Emerging markets are gaining considerable economic growth. In 2008 China will jump from fourth to second position above Japan and Germany and is forecasted to increase its Travel & Tourism Demand four-fold by 2018, accounting for US$2,465 billion, with an annual growth rate of 8.9 per cent. Among the fastest growers in 2008, Macau leads with a growth rate at 22 per cent.
Highlighting the challenges of market volatility and external events faced by the industry, Alex Christou, managing partner of Accenture’s transportation and travel services said, “High performance companies will differentiate themselves by being highly focused on their individual customers. The winners will be companies that take a balanced view, driving customer intimacy and product innovation while driving non-value added costs out of their operations.”